Dynamic Hedging

Dynamic Hedging is the only plug-and-play solution in the industry that lets you automatically execute micro-hedging strategies

Keeping your company’s FX exposure always under your control, in any currency pair, regardless of the number of transactions, with some clients executing over 100,000 micro hedges a year in over 50 different currency pairs.

Find out if our solutions meet the needs of your business

Traditional currency hedging strategies means reaching a certain limit – be it a nominal amount or a rate level – before instructing a forward or spot transaction. However, this ‘one-size fits all’ approach is not optimal for many industries. E-commerce, travel, digital advertising (Adtech), etc. all work in high volume, low margin environments with varying cash cycles.

For most companies, waiting until expected revenue hits a certain limit means facing prolonged exposure to extremely volatile currency markets. Micro-hedging addresses this shortcoming by hedging each transaction – being a receivable, a payable, or anything similar – while they occur.

Further, with Kantox’s Dynamic Hedging, treasury teams don’t have to worry about trying to manually monitor tenths, hundreds or even thousands of transactions a day. Instead, Kantox’s Dynamic Hedging streamlines the micro-hedging workload, no matter how many transactions or how small the amount.

With Kantox’s Dynamic Hedging, companies can effortlessly implement micro-hedging in their finance department – faster than you think possible.

Is Dynamic Hedging the solution for your business?

Does your corporation need to handle numerous and frequent transactions in foreign currencies, possibly in several currency pairs, which are very complicated to hedge manually or using traditional FX providers like brokers or banks? Then this solution is particularly suited to your business, including companies in sectors such as:

Travel Industry

Digital Advertising (Adtech)

E-Commerce Businesses

Chemicals

Raw materials

And many more…

Plus many more with dynamic pricing models and accounting differences challenges.

The benefits of Dynamic Hedging:

Guarantee your margins:

Markets are more and more volatile and foreign currency risk can lead to significant financial losses. Your profit margin can be quickly eliminated, putting your company in financial trouble.
Dynamic Hedging will help you hedge your risk – transaction by transaction – guaranteeing your profit margin on any receivable or payable and on your company as a whole.

Save time:

Managing FX risk based on manual and / or phone trading is time-consuming and absolutely inefficient. Even with people fully dedicated to this task, micro-hedging is a very big challenge. Dynamic Hedging can manage your currency exposure automatically with clear rules and total visibility. It is all about using software instead of people to streamline trades and execute micro-hedging strategies with Straight Through Processing (STP).

Gain security:

Executing FX trades manually or over the phone will inevitably generates mistakes at some point. Dynamic Hedging automates the entire process and avoid human errors or delays.

Eliminate accounting differences:

The accounting differences caused by exchange rates can cause conflicts between a company’s accounts and its actual situation. By law, companies must record their books in their functional currency. This means that any assets or liabilities in another currency have to be converted into the working one using the spot rate. However, the exchange rates for the most commonly used currencies are in constant flux, and sometimes undergo periods of major volatility. This instability generates significant differences in the exchange rates applicable on the invoice and payment dates. The process of putting a real value in your own currency from FX entries every time you do the accounts generates profits and losses. When the volume of such entries is significant, accounting differences can distort the picture of the company’s financial performance. Dynamic Hedging will help you drastically reduce accounting differences and make hedge accounting, along with effectiveness testing, much easier.

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